STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

DAVID W CONIS JR, Employee

FLOODBUSTERS INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 10602337RC


An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own.

DECISION

The decision of the administrative law judge is affirmed. Accordingly, the amounts earned by the claimant performing services for the employer during the applicable base period do not constitute base period wages. Recovery of overpaid benefits is waived.

Dated and mailed August 12, 2010
conisda . usd : 115 : 1 EE 445

/s/ James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

Ann L. Crump, Commissioner

MEMORANDUM OPINION


The claimant (Conis) performed services during the applicable base period as a technician for the putative employer (Floodbusters), a water damage remediation business.

The issue is whether the amounts Conis was paid for performing these services constitute base period wages.

In performing these services, Conis frequently retained the services of others to assist him. Conis selected these assistants and determined the amounts they would be paid. Although these amounts were remitted directly to the assistants by Floodbusters, they were then deducted from Conis's share (30%) of the total job amount.

Wisconsin Statutes § 108.02 states as follows, as relevant here:

108.02 Definitions. As used in this chapter:

(4) Base period. "Base period" means the period that is used to compute an employee's benefit rights under s. 108.06...

(4m) Base period wages. "Base period wages" means:

(a) All earnings for wage-earning service which are paid to an employee during his or her base period as a result of employment for an employer;...

(12) Employee.

(a) "Employee" means any individual who is or has been performing services for pay for an employing unit, whether or not the individual is paid directly by the employing unit, except as provided in par. (b), (bm), (c), (d), (dm) or (dn)....

(d) Paragraph (a) does not apply to a contractor who, in fulfillment of a contract with an employing unit, employs any individual in employment for which the contractor is subject to the contribution or reimbursement provisions of this chapter.

Wisconsin Statutes § 108.03, provides as follows, as relevant here:

(13) Employer.

(e) Any other employing unit, except a government unit, shall become an employer as of the beginning of any calendar year if the employing unit:

1. Paid or incurred liability to pay wages for employment which totaled $1,500 or more during any quarter in either that year or the preceding calendar year; or

2. Employed at least one individual in some employment in each of 20 or more calendar weeks in either that year or the preceding calendar year, whether or not the same individual was in employment in each such week and whether or not such weeks were consecutive; except that

During the first two quarters of 2009, Conis paid wages to his assistants of $8,000. By necessity, therefore, Conis paid wages totaling $1,500 or more during one quarter of 2009. By operation of Wis. Stat. § 108.02(13)(e)(1), Conis became a statutory employer, subject to the unemployment insurance contribution provisions of Chapter 108, no later than January 1, 2009.

Pursuant to Wis. Stat. § 108.02(4m), in order to be considered base period wages, earnings must be "paid to an employee during his or her base period as a result of employment for an employer..."

Because Conis, in fulfillment of his agreement with Floodbusters, employed individuals for whom he was subject to the unemployment insurance contribution provisions of Chapter 108, he does not, by operation of Wis. Stat. § 108.02(12)(d), qualify as a statutory employee, and the amounts earned by Conis from Floodbusters during the time period relevant here do not qualify as base period wages. Hansen Trucking, Inc. v. LIRC, 126 Wis. 2d 323, (1985). See, also Weger v. Rural Mutual Insurance Co., UI Hearing No. 08603489MW (LIRC Oct. 28, 2008); Asencio v. Network Communications, Inc., UI Hearing No. 04003286MD (LIRC Feb. 25. 2005).

The department's failure to analyze the applicability of Wis. Stat. § 108.02(12)(d) during its adjudication of this matter constitutes department error, and recovery of the resulting overpayment of benefits is therefore waived.



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